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Until very recently, Kohl's (KSS) - Get Kohl's Corporation Report seemed well positioned to shine in 2019. The Wisconsin-based retailer had an outstanding holiday quarter, with comps rising on the back of a robust men's, children's and active wear businesses, along with stable margins supported by sustained pricing power and competent inventory management.

But the narrative has quickly shifted. On Tuesday, ahead of the opening bell, Kohl's reported a much less impressive set of results. It was hard to spot strength anywhere in the company's financial statements, let alone in the revised outlook for the remainder of the year.

Merchandise revenues of $3.8 billion dropped by more than 3% over year-ago levels, with unremarkable comparable sales contraction of 3.4% lagging expectations by a wide margin. Driving the under-performance, management pointed the finger at a handful of key factors that included the atypically cold weather in the Midwest and Northeast regions of the United States, particularly in February.

But climate is the least of the company's concerns, as it tends to cause only temporary headwinds to financial performance. More worrying were the company-specific issues impacting sales growth and margin, including what seems to have been lack of product innovation in home goods and marketing initiatives that failed to deliver the desired results. Investors, having grown accustomed to Kohl's executing almost flawlessly in the recent past, were disappointed, with shares tumbling 11.2% to $55.86.

The better news is that the executive team claims to have seen improving sales trends in the past couple of months. But the path forward does not necessarily look less rocky. The business will continue to face a highly competitive environment, which is likely to exert pricing pressure as Kohl's attempts to improve its product portfolio, in addition to the specter of increased tariffs (more than 20% of the retailer's merchandise is sourced from China).

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The new earnings projection of $5.30 per share at the mid-point of the range, an 11% guidance haircut that seems to justify the stock's behavior in post-earnings trading, reflecting the challenges ahead.

Judging by the first quarter results and the expectations for the next couple of months, Kohl's first half of 2019 is shaping up to be mediocre at best. Hope rests on the retailer's ability to produce more encouraging sales growth in the third and fourth quarters through new brand launches, aggressive pricing and the full-scale rollout of the Amazon (AMZN) - Get Inc. Report  in-store return program -- pinpointed in the earnings call as the company's "single biggest initiative of the year."

In the meantime, margins are likely to remain capped by higher merchandise and online fulfillment costs, along with lower prices needed to recapture market share.

With the retailer's financial recovery still in the very early stages, the stakes have been raised. The management team now has its hands full, and it will need to execute much better than it did in the first quarter of the year to regain investor confidence.

Some could reasonably argue that a current-year earnings multiple of 10.4x on Kohl's shares makes for a compelling value play at these levels. On the other hand, I believe that an investment in this stock has become uncomfortably speculative, and would rather see early signs of a bounce-back in business fundamentals before considering placing a bet on this name.

The author has no positions in any stocks mentioned in this article.